AP automation is a term used to describe the ongoing effort of
many companies to streamline the business process of their accounts payable departments.
The accounts payable department's main responsibility is to
process and review transactions between the company and its suppliers.
Automating the invoice payment process.
·
Invoice Capture: Receives paper or electronic
invoices, captures important data, and inputs into a workflow or payment system
·
Workflow/Approval: Routes invoice for approval
·
Payment and Reconciliation: Processes vendor
payments via a number of payment methods (AP Card, ACH, check, wire, Supply
Chain Finance)
Why the need? Do the math!
Companies are looking to increase process efficiencies
and reduce costs. Let’s look at the
average invoice processing costs:
·
The average manual AP invoice costs $30.00 and
the average AR invoice $4.00 per invoice.
·
On average the cost of a fully automated AP invoice
is $3.50 and the AR invoice $2.25 per invoice.
·
The cost savings for the AP invoice is $26.50
per invoice and $1.75 for each AR invoice.
·
That‘s a 90% cost savings for the AP invoice and
44% for the AR invoice.
Then consider the average invoice storage cost:
·
A paper invoice storage cost is $3.90 per
invoice and the AR invoice is $1.90.
·
Whereas the electronic invoice storage cost
$1.30 per invoice and the AR invoice is $1.30.
·
The cost savings for the AP invoice is $2.60 per
invoice and $.60 for each AR invoice.
·
That‘s a 67% cost savings for the AP invoice and
32% for the AR invoice.
The cost savings are significant, but even better; there
is a 37% error reduction with automated invoicing.
What does AP Automation mean
to me?
·
Automated entry of
invoice information
·
Exception Invoices routed to
proper workbasket for processing
·
Electronically route
invoices for review/approval
·
Focus on exception and
vendor analysis
·
No manual filing or retrieval
·
Complete audit trail
What to look for in a solution.
The AP automation
provider is one of the determinants deciding the success or failure of your AP
project. You should consider a vendor that can equip your company with all of
the features your AP department needs. iCapture is a
typical example that provides a layered approach to the invoice problem,
helping you improve efficiency and many other benefits. Check that the software
can be easily integrated with your other systems. Learn about the software’s
security and compliance options. Most
importantly, insure that the solution can be tailored to your organizations
size and scope and fits your specific needs and will integrate with your ERP system.
Want to fully understand the AP automation and discuss your needs?
Contact inFORM Decisions today! www.informdecisions.com
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